A common issue faced by Pennsylvania automobile insurance carriers is whether the allowable reductions under Act 6 apply to the bills issued by out-of-state medical providers for treatment rendered as a result of a motor vehicle accident.
More specifically, where a Pennsylvania resident with a Pennsylvania automobile insurance policy gets into an accident in another state, such as in New Jersey, New York, Maryland or Delaware, and treats with medical providers in that other state, is the first party medical benefits carrier entitled to pay only the Act 6 reduced amounts of the related medical expenses as set forth under 75 Pa.C.S.A. Section 1797?
This issue appears to be an open one in the apparent absence of any case law specifically addressing the question presented.
It certainly appears that any medical bills issued by any Pennsylvania medical provider are subject to Act 6 reductions regardless of the place of the accident.
However, excepted in very limited circumstances noted below, it appears that medical bills issued by an out-of-state medical provider would be addressed by the law of that other state and not by Pennsylvania’s Act 6 reduction statutory framework.
Effect of Policy Language Limited
Typically the first place to look in determining the answer to any coverage question would be the insurance policy at issue. Courts will usually follow policy language agreed by the parties to resolve any disputes unless that policy language is found to violate Pennsylvania law or go against recognized public policy concerns.
Some auto policies may contain language mandating that any payment of first party medical benefits will be made pursuant to Section 1797 (a) of the Pennsylvania Motor Vehicle Financial Responsibility Law.
Accordingly, the courts of Pennsylvania could possibly construe this language as indicating that payment of any medical expenses under this policy would be under the Act 6 reductions required by Section 1797 regardless of where the treatment is completed as this was what was agreed to by the parties under this insurance contract.
However, such an analysis pertaining to the applicability of the policy language would be limited by pertinent provisions of the Pennsylvania Code. Under the below limitations of the Pennsylvania Code, it does not appear that a carrier’s first party benefits policy language would carry the day on the issue of whether Pennsylvania’s Act 6 reductions could be applied to an out-of-state medical provider’s bills.
Under 31 Pa. Code Section 69.11 of the Pennsylvania Code, it is provided, as follows:
“Section 69.11. Payment limitation applicability.
• The payment limitations of Act 6 apply to a provider rendering services to an injured person whose medical costs are covered by automobile insurance issued under the MVFRL. The payment limitations of Act 6 also apply to providers not currently participating in Medicare.
• The payment limitations of Act 6 apply in cases when care is rendered by a Pennsylvania licensed provider to a Pennsylvania resident covered by automobile insurance for injuries arising out of the maintenance or use of a motor vehicle, irrespective of where the injuries occurred or where the care is rendered.”
This code language was taken from the 1991 regulations issued by the insurance commissioner after the MVFRL was updated. In particular, Section (b) allows for Act 6 reduction only against a Pennsylvania medical provider to a resident, regardless of where the care is rendered or where the injuries occurred.
Accordingly, it appears certain that where an individual is entitled to first party medical benefits from a carrier is injured in an out-of-Pennsylvania motor vehicle accident, any treatment by any Pennsylvania medical provider would be subject to the Act 6 reductions pursuant to the policy language and this Pennsylvania code language.
Although no case law on this issue has been found, it is noted that this code provision has been construed by litigators as mandating that the Act 6 reductions specifically only apply to Pennsylvania medical providers and not to out-of-Pennsylvania providers.
Also, due process and constitutional law issues would likely come into play to prevent Pennsylvania’s Act 6 reductions to be applied to out-of-state medical providers seeking full payment for the medical treatment they have provided to the patient.
However, an argument can be made under the above Pennsylvania code provision that, if the out-of-state medical provider is also licensed to practice in Pennsylvania, then Act 6 reductions could be apply to that medical provider’s medical bills. This is so under the code language that an Act 6 reduction is permitted against a Pennsylvania medical provider for treatment rendered to a Pennsylvania resident, “irrespective of where the injuries occurred or where the care is rendered.”
It is also otherwise noted that, depending upon the law of that other state where the treatment was rendered, the Pennsylvania first party carrier may or may not be able to subrogate against the tortfeasor defendant in an effort to secure a payback of the first party benefits paid out under the policy. This would depend upon the law of that other state. •